As the end of each quarter approaches, it is a good time to evaluate goals for your coming quarter. For many, this means creating a set of Key Performance Indicators (KPIs) or Objectives and Key Results (OKRs) they need to hit in the following time period.
Unfortunately, understanding how to create those goals is difficult. Determining what to measure for your department for your specific business can be a nerve-wracking experience. The most common way to create a KPI is to use the "SMART" method, which is an anagram for Specific, Measurable, Attainable, Relevant, and Time-Bound. In other words, you must choose one thing to measure, and set a time limit on when to reach it.
While on the surface, this may seem simple, the hardest part is discerning what is a "vanity" metric--a number that sounds good but doesn't do much to move your business forward--and what is a useful metric. Even more confusing is that what may be irrelevant for one company may be the most important data for another.
Whenever I work on these goals, I always start with determining what is relevant to the department for the goal. For marketing, goals will be centered around engagement, like sales and written reviews--not shares, clicks, and follows. For customer service, goals will be around customer happiness and resolution rates.
Once I've determined the relevance factor, I'll then drill down to a specific thing I want to measure and make sure the goal should be reasonably attached within a certain time limit. While it seems odd, these types of goals should be designed to be met, not exceeded.
As I've created these types of goals for many years, I've streamlined it to a faster, three-step process:
The first step in determining a KPI is finding a metric that will be useful to you. Depending on your role or department, these can be vastly different.
Thankfully, there are resources online to help you with this. OKRexamples.co and KPILibrary.com have thousands of examples of useful metrics that work in all types of businesses. You simply need to identify which work for you and plug in numbers you want to reach.
Once you've determined your goal, you can't simply sit back and wait for it to happen. To ensure you meet it, you should be constantly measuring it and make tweaks along the way to help you to reach it.
T-Mobile, for example, uses analytics company Marchex to measure its customer service calls. It also uses a dashboard that highlights interesting calls--such as the top five positive and negative calls per month. Anyone with access to that dashboard can see the number of calls over time, length of calls, and even how many of each they're getting per store. With this type of information, they can pinpoint what stores or employees may need additional training, and implement changes fairly quickly.
Lastly, except in special circumstances (like "update our systems for Y2K compliance"), useful goals are ones that can be reused. For example, when you set a goal to increase sales by 10 percent per quarter and meet it, your business will grow over time exponentially--regardless of what method you use to fulfill the KPI.
No matter what KPIs you decide upon, you should be measuring something. After all, you'll never truly know how your business is doing unless you can benchmark it.